Matt Hougan, the Chief Investment Officer at Bitwise, predicts that the crypto market has the potential to grow into a $20 trillion industry. He highlights the fact that regulatory clarity in the United States could be the key to unlocking massive investments from financial advisors.
Over the past five years, financial advisors have been hesitant to enter the crypto market due to the lack of clear regulations. Hougan explains that this uncertainty has been a major obstacle preventing significant investments in the industry. However, recent political developments suggest a shift towards clearer guidelines. The repeal of Staff Accounting Bulletin 121 by Democrats and the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) by the House could signal positive changes for the crypto sector.
Hougan believes that once regulations become more stable, the $20 trillion financial advisory industry could start investing in crypto, potentially leading to a substantial increase in market capitalization. He points out that BlackRock’s recent foray into the crypto space has already made an impact, and if Wall Street fully embraces crypto, the effects would be even more significant.
Despite the approval of spot Ether exchange-traded funds by the Securities and Exchange Commission, challenges still remain. President Joe Biden recently vetoed the repeal of SAB 121, indicating that regulatory hurdles persist. Nevertheless, Hougan remains optimistic about the progress being made in the industry.
Hougan notes that there is still a vast untapped potential in the crypto market, with many financial advisors remaining on the sidelines. He believes that if they fully understood the implications of crypto-related political developments, the market could reach new heights. While significant policy changes have yet to materialize, with SAB 121 repealed and FIT21 facing obstacles in the Senate, regulatory clarity is still uncertain.
